Finch Therapeutics: Section 363 Sale of 160-Patent Microbiome Portfolio After Three-Year Wind-Down

Finch Therapeutics Group, Inc., a non-operating microbiome therapeutics company, filed voluntary chapter 11 petitions on March 22, 2026, in the District of Delaware to pursue a section 363 sale of its intellectual property portfolio and contingent litigation proceeds. The filing followed a three-year wind-down that began with the January 2023 discontinuation of the company's only clinical-stage program and a 95% workforce reduction. As of the petition date, Finch has one full-time employee — CEO Matthew P. Blischak — no funded debt, and approximately $3.5 million in cash to fund the cases without debtor-in-possession financing. Three affiliated entities filed concurrently under joint administration.

The debtors' primary assets are an IP portfolio of over 160 U.S. and foreign patents and a contingent $25.0 million jury verdict against Ferring Pharmaceuticals for patent infringement. Rock Creek Advisors, LLC has been engaged as sales agent to market the IP and litigation rights through a competitive auction process.

Debtor(s)	Finch Therapeutics Group, Inc. (4 jointly administered entities)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	26-10409
Judge	Hon. Laurie Selber Silverstein
Petition Date	March 22, 2026
Claims Agent	Omni Agent Solutions, Inc.

Microbiome Pipeline and Takeda Collaboration

Finch Therapeutics was founded in 2014 to develop FDA-approved microbiome-based therapeutics, tracing its origins to OpenBiome, a nonprofit stool bank established by MIT graduate students. The company's lead candidate was CP-101, an orally administered capsule for recurrent Clostridioides difficile (C. diff) infection that demonstrated a 74.5% cure rate in a Phase 2 trial. The pipeline also included FIN-211 for autism spectrum disorder and FIN-524/FIN-525 for inflammatory bowel disease, the latter two developed under a global collaboration with Takeda.

In March 2021, Finch completed an upsized IPO of 7.5 million shares at $17 per share, raising approximately $128 million. Including pre-IPO venture funding from Baupost Group, MSD Partners, and Susquehanna International Group, total capital raised exceeded $300 million. Finch received more than $44 million from Takeda over the course of their partnership before Takeda terminated the collaboration in August 2022.

Clinical Competition, Workforce Reductions, and Liquidity Decline

Per the First Day Declaration, three factors drove the filing.

Clinical competition. While Finch was still enrolling its Phase 3 PRISM4 trial, two competitors received FDA approval first. In November 2022, Ferring Pharmaceuticals received approval for REBYOTA, and in April 2023, Seres Therapeutics' VOWST became the first FDA-approved oral microbiome therapy. Both products targeted the same recurrent C. diff indication as CP-101.

Workforce reductions and funding shortfall. Takeda's 2022 termination removed ongoing R&D reimbursement. Three rounds of layoffs followed: ~20% in April 2022 after an FDA clinical hold, ~37% in September 2022 after Takeda's departure, and 95% in January 2023 when the company discontinued CP-101 and accumulated approximately $250 million in losses.

Liquidity constraints. The debtors exhausted their ability to wait for resolution of the Ferring patent litigation and subsequent appeals while maintaining ongoing operating costs. An out-of-court transaction was deemed unfeasible due to limited liquidity and the requirement for shareholder approval.

Patent Portfolio and Section 363 Sale Process

Intellectual property. The debtors hold over 160 U.S. and foreign patents and patent applications covering microbiome therapeutic compositions and manufacturing processes. Before the filing, Finch prevailed against Ferring Pharmaceuticals in a declaratory judgment action (D. Del. Case No. 1:21-cv-01694), establishing the validity of its core microbiome patents.

Contingent litigation proceeds. In August 2024, a jury awarded the debtors and the University of Minnesota $25.0 million in damages and $815,061 in royalties against Ferring Pharmaceuticals and Rebiotix Inc. for patent infringement. The verdict remains subject to post-trial motions and potential appeals; no proceeds have been received.

Sale process. The debtors have engaged Rock Creek Advisors, LLC as sales agent to market the IP portfolio and litigation rights. They intend to seek court approval for bidding procedures and a stalking horse bidder to establish a floor price for a competitive section 363 auction.

No Funded Debt and Cash Position

The debtors have no funded debt. A prepetition $16.2 million obligation to Hercules Capital, Inc. was satisfied in full in January 2023.

As of March 18, 2026, the debtors held the following bank accounts:

The approximately $3.5 million in operating cash will fund the chapter 11 cases without DIP financing. The $2.27 million SVB security deposit is tied to the Hood Park lease the debtors are seeking to reject.

Hood Park Lease Rejection

A first-day motion seeks immediate rejection of a 10-year lease with Hood Park, LLC for approximately 61,139 square feet of office and laboratory space at 100 Hood Park Drive, Charlestown, Massachusetts. The lease, executed August 3, 2021, carries total fixed rent of approximately $51.6 million through its December 31, 2031 expiration.

The debtors stopped paying rent in October 2025 and have never occupied the premises. Previous subleases to Galy Co. and Genetix Biotherapeutics expired prior to the petition date. Hood Park LLC holds the largest unsecured claim at $2,757,541.92. The motion requests rejection nunc pro tunc to the petition date and seeks abandonment of any remaining personal property at the premises as of inconsequential value.

Creditor Claims, Equity, and Professional Retentions

The voluntary petition lists the following as the largest unsecured claims:

Retained professionals include Ropes & Gray LLP as bankruptcy counsel, Chipman Brown Cicero & Cole, LLP as local counsel, Rock Creek Advisors as financial advisor, and Omni Agent Solutions as claims and noticing agent. Pro hac vice motions were filed for three Ropes & Gray attorneys and one Chipman Brown attorney.

Equity ownership is concentrated among three holders: Crestovo Investor LLC holds 24.72%, Symbiosis LLC holds 9.99%, and Great Point Capital LLC holds 7.49%, with approximately 1.6 million total shares outstanding.

Key Timeline

Frequently Asked Questions

When did Finch Therapeutics file for bankruptcy? Finch Therapeutics Group, Inc. and three affiliated entities filed voluntary chapter 11 petitions on March 22, 2026, in the U.S. Bankruptcy Court for the District of Delaware.

Why did Finch Therapeutics file chapter 11? The debtors are pursuing a section 363 sale of their IP portfolio and contingent Ferring litigation proceeds. The filing was driven by depleting liquidity, a $51.6 million lease obligation, and the inability to complete an out-of-court transaction due to shareholder approval requirements.

What assets does Finch Therapeutics have? The primary assets are over 160 U.S. and foreign patents covering microbiome therapeutics and a contingent $25.0 million jury verdict against Ferring Pharmaceuticals for patent infringement, plus $815,061 in royalties.

Does Finch Therapeutics have any debt? No. The debtors have no funded debt. A $16.2 million obligation to Hercules Capital was paid off in January 2023. The cases are being funded from approximately $3.5 million in cash on hand.

Who is the claims agent for Finch Therapeutics? Omni Agent Solutions, Inc. was retained as claims and noticing agent.

Who are the largest creditors? The largest unsecured creditor is Hood Park LLC at $2,757,541.92 for rejected lease obligations. Other listed creditors include Morgan Lewis & Bockius LLP ($850.05) and Anderson & Kreiger, LLP ($755.00).

Is Finch Therapeutics still publicly traded? Finch delisted from Nasdaq and deregistered with the SEC in October 2024. Approximately 1.6 million shares were outstanding, with concentrated ownership by Crestovo Investor LLC (24.72%), Symbiosis LLC (9.99%), and Great Point Capital LLC (7.49%).

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